As the U.S. and Russian governments trade accusations over espionage activities and human rights abuses, Baker & McKenzie of counsel Thomas Firestone, a former Justice Department official and liaison to the U.S. embassy in Moscow, has been expelled from the country.
Firestone’s expulsion is the latest episode in a simmering feud between the two countries that began in earnest last December with the passage by Congress of a law designed to penalize Russian human rights abusers. Named for Sergei Magnitsky—a Russian lawyer who died in a Moscow jail under mysterious circumstances after allegedly trying to expose government fraud—the legislation prompted the Kremlin to retaliate with a similar law aimed at Americans.
The ill will flared anew last week when Russian security services detained an alleged CIA spy in Moscow. The accused, a diplomat employed by the U.S. embassy named Ryan Fogle, was paraded before television cameras and accused of possessing stacks of cash, a compass, a knife, a map, a recruitment letter, two wigs, and other disguises that suggested he was involved in acts of subterfuge.
While the Russians claimed Fogle was apprehended trying to woo with $1 million in cash an agent of its domestic security agency, the FSB, The Independent reports that the situation was somewhat more complicated. According to the British newspaper’s account, Fogle and his handlers were attempting—as part of an ongoing U.S. intelligence investigation into the circumstances surrounding last month’s Boston Marathon bombings—to establish contact with a senior Russian agent who had returned from an assignment in the Caucasus.
Whatever the explanation, the Kremlin subsequently declared Fogle "persona non grata" and ordered him to leave the country. He did so this past weekend on a plane bound for New York, shortly after an FSB spokesman breached diplomatic protocol and publicly revealed the name of the CIA’s station chief in Moscow. Meanwhile, the U.S. ambassador to Russia, Michael McFaul, was summoned to meet with foreign ministry officials about the entire affair.
Even as Fogle was headed back to the United States, The New York Times broke the news that before he was taken into custody, Russian authorities had stopped Baker & McKenzie’s Firestone at Moscow’s Sheremetyevo airport upon his return to the country from a trip aboard. Firestone was interrogated for 16 hours before also being declared persona non grata and ordered to leave Russia, according to The Times, which quoted an anonymous source familiar with the matter attributing the incident to Fire­stone’s refusal to accept an FSB invitation in March to spy for the Russians.
Firestone, a Foreign Corrupt Practices Act expert who is now listed on Baker & McKenzie’s website as of counsel with the firm in Washington, D.C., did not respond to a request for comment. Before joining the firm last September, Firestone was a resident legal adviser at the U.S. embassy in Moscow and before that an assistant U.S. attorney assigned to the Eastern District of New York, where he prosecuted cases involving the Italian mafia.
Baker & McKenzie provided Daily Report affiliate The Am Law Daily with a statement in which it expressed some bafflement over Firestone’s forced relocation from Russia.
"One of our colleagues, Tom Firestone, who formerly was an employee of the [U.S. embassy] in Moscow, was refused admission to the Russian Federation on May 5. Neither our colleague nor we have been informed of the reason for this action," the firm said in the statement. "We have no reason to believe that our colleague has engaged in wrongdoing of any kind. Until the reasons for the Russian government’s action are clear, we will have no further comment. Mr. Firestone is now working in our Washington, D.C., office."
Besides its Moscow office, which opened in 1989 and now has more than 110 lawyers, Baker & McKenzie has a second Russian outpost in St. Petersburg. The firm, which is among the world’s largest, significantly expanded its Russian operations in 2008 when it picked up a 22-strong team from accounting giant PricewaterhouseCoopers.
Like many Am Law 100 firms, Baker & McKenzie considers Russia—which has tried to position itself as a global financial services center in recent years—to be a key cog in its global apparatus. At the same time, the firm, which advised on a $2.25 billion merger between West Siberian Resources and Alliance Oil in 2008, noted in a recent cross-border M&A compliance report that doing business in the country presents certain challenges.
"More and more businesses are worried about the U.S. FCPA and the U.K. Bribery Act," says Baker & McKenzie’s Moscow office managing partner Sergei Voitishkin in the report. "Plus, there is a greater focus on enforcing Russian anticorruption legislation. For corporate executives, compliance is the No. 1 issue in Russia."
Though not addressed explicitly in the report, one of those challenges is a continuing concern about respect for the rule of law in Russia. The Am Law Daily delved into the issue last year while reporting on the controversial arrest on corruption charges of Alexei Navalny, a Russian lawyer and leading critic of President Vladimir Putin. Navalny, who was hit with new charges tied to his legal credentials earlier his year, has vowed to fight the case against him.
Navalny’s trial is not the only case involving a prominent Kremlin foe that remains unresolved. After a slight delay, a highly unusual posthumous trial of Magnitsky began in March, a proceeding in which local lawyers have been forced to participate and the verdict appears to be an already foregone conclusion. The late lawyer’s family has refused to take part in what they call a show trial. Magnitsky died at 37 in a Moscow pretrial detention facility in late 2009 under conditions that remain in dispute.
Magnitsky’s supporters insist that he died as a result of being denied medical care after being arrested for trying to blow the whistle on a massive government fraud, while Russian officials claim he suffered a fatal heart attack prior to standing trial on tax evasion charges. Russian investigators dropped an inquiry into the cause of Magnitsky’s death in March.
By enacting the Sergei Magnitsky Rule of Law Accountability Act of 2012, which bars Russians accused of human rights abuses from entering this country or owning assets here, the U.S. lined up behind the deceased lawyer’s backers. The U.S. Department of the Treasury went a step further in April by publishing a list of 18 Russian individuals—16 of them linked to the Magnitsky case—accused of human rights abuses under the new legislation. Russia responded with an 18-person list of its own that includes former Bush administration lawyer David Addington.
Some Kremlin observers see Firestone’s expulsion as part of an effort by the Putin regime to embarrass the U.S. with a series of tit-for-tat spy scandals that play to a domestic audience while devaluing the Magnitsky Act.
"The key issue here is this all comes down to Russia’s response to the Magnitsky bill," says Robert Amsterdam, a founder of Amsterdam & Partners who was the subject of Kremlin intrigue himself a few years ago in connection with his representation of imprisoned oligarch and longtime Putin nemesis Mikhail Khodorkovsky. (Last year The American Lawyer profiled Amsterdam’s unique practice of political litigation.)
Others are less sure about Firestone’s detention and ultimate ejection from Russia being directly linked to the Magnitsky matter.
Jamison Firestone, a cofounder and managing partner of Moscow-based law and accounting firm Firestone Duncan, says that if the Baker & McKenzie lawyer did indeed rebuff the FSB, that is likely what got him kicked out of the country.
"At the time of his exclusion he was working for Baker & McKenzie focusing on FCPA compliance and anticorruption measures for foreign companies and his job was totally not political in any nature," says Jamie Firestone, who is not related to Tom Firestone. "The only conceivable reason he could have been barred was his refusal to meet unofficially with FSB officers and the fact that he reported [their] approach to the [U.S. government] and his employer."
Jamie Firestone, who fled Moscow for London in 2010, has firsthand knowledge about the consequences of advising clients whose interests run counter to those of the Kremlin. Magnitsky was the former head of Firestone Duncan’s tax practice whose work representing London-based hedge fund Hermitage Capital in a campaign against corruption at Russian companies soon made it the focus of the Kremlin’s wrath. Firestone Duncan and Hermitage Capital subsequently put together a mini-documentary telling Magnitsky’s story and both became vocal advocates for the passage of the Magnitsky Act.
Noting Thomas Firestone’s significant role in drafting legislation that "prohibits the detention of people being tried for economic crimes," Jamie Firestone says that "Tom’s knowledge of Russian law is better than 99.9 percent of all Russian lawyers."
Jamie Firestone adds that Baker & McKenzie’s Firestone became intimately familiar with certain aspects of Magnitsky’s story during his time as a Justice Department employee stationed at the U.S. embassy in Moscow—specifically the complaints about Magnitsky’s arrest, the terrible conditions in which he was incarcerated, and the alleged denial of medical care.
Nonetheless, Jamie Firestone says, Tom Firestone never brought charges against any Russians related to the Magnitsky case and thus doesn’t meet the criteria for exclusion from the country under its new Dima Yakolev law—known in the U.S. as the anti-Magnitsky bill after its passage late last year—a provision of which also prohibits U.S. citizens from adopting Russian children.